Australian Resident Vs Non Resident for tax purposes

[4MyEgo]

Hi Guys

 

Can I firstly say that this post is more for learning for both you and me as Aussies, I have found some other information and provided information on this topic in other posts, but thought it best to create one for me and everyone else, because we crave information on this topic for our retirement.

 

I am in the process of doing my 1st tax return for the financial year 2015/2016, having departing the "lucky country" on the 26th November 2015 to live here in Thailand with my family, one child going to school, the other to follow in a couple of years. 

 

I have now past the 183 day rule as at 30 June 2016 (200 days) and was originally going to try and say that I was an Australian Resident for tax purposes as I didn't want to have to pay 32.5 cents in the $, especially from the sale of a property that I recently sold which will be subject to capital gains tax on a pro-rated basis due to me buying it and renting out 1st, then moving into it after 14 months, so I get the 50% capital gains tax discount having held it for more than a year (I hope).

 

Since departing Australia on 26th November I have received mail from the Centrelink advising me that Border Protection (Immigration) have advised them that I have been out of the country for more than 6 weeks and that if I am receiving any family part A and part B benefits they will cease until I advise them that I returned to Australia. I also received a letter from the Electoral Office advising me that I can no longer vote, perhaps my mistake because I told them to forward me the voting papers here for the last election.

 

The benefits to me becoming a Non Resident for tax purposes, Vs being a Resident look good, or am I missing something ?.

 

As a non resident this is how I see it:

 

1) As a Non Resident I am entitled to a part tax threshold of $15,437 based on having worked for 5 months (July to November) when I departed Australia Vs the $18,200 as an Australian Resident for tax purposes.

 

2) I have no property in Australia, as I recently sold it as previously mentioned.

 

3) I have bank term deposits and as a non resident (10% withholding tax) will be payable on the interest earned in those accounts which will be sent to the ATO by the banks.

 

4) Shares that I buy and sell do not incur capital gains tax, and no tax on dividends that are fully franked (tax already taken out).

 

5) I lose any entitlement to Medicare, however I don't pay the 2% Medicare Levy Surcharge, and if I return to Australia for more than 6 months I can reclaim my Medicare entitlements as a resident.

 

6) I cannot claim the OAP unless I return to Australia for a minimum of 2 years prior to turning 67 and provide them with evidence that I am living there and intend on living there, and not returning to just get the OAP, once approved I can go back to Thailand with the portability of the OAP, only losing some benefits which I would only use in Australia.

 

7) As I don't earn any income outside of Australia, I don't have to lodge a tax return every again.

 

8) For the tax that I am doing now, departing year, (end financial year 2015/2016) the difference in tax above the part tax threshold of $15,437 to $37,000, I will pay 32.5 cents in the $ Vs 19 cents in the $ if I was an Australian Resident. 

 

The tax "difference" between a Non Resident ($7,008) Vs ($3,572) as an Australian Resident, however, as a Non Resident the 2% Medicare Levy Surcharge is removed, therefore the amount is less depending on what income you earned, in my case the tax payable is reduced to about $4,431 as a Non Resident, maybe reduced even more depending on the final income earned with adding the capital gains tax payable on top of the income, so its not too bad, because once you pass the $37000, it jumps to 32.5 cents in the $ up to $80,000 for either residence, and then 37 cents in the $ from $80,001 to $180,000 for either residence.

 

So based on the above please feel free to put in your opinions of the benefits and what you believe that I might have missing or losing in changing my residency status, from what I can see is it will cost me $4,431 or less in the "difference" which is not all that bad, plus all the benefits above as I see it.

 

Appreciate your input into this post in advance and or have learned something new in the least.

Edited September 10, 2016 by 4MyEgo

[starky]

If you have paid into any superannuation fund in Australia in the last 12 months you aren't eligible for non- resident 

[4MyEgo]

1 hour ago, starky said:

If you have paid into any superannuation fund in Australia in the last 12 months you aren't eligible for non- resident 

 

Thanks for your input Starky, as I worked for 5 months, payments were made to superannuation, do you have anything in writing from a website to back this up ? It is always interesting to hear others opinions, not having a dig or a go at you, but I find that a lot of the times, word of mouth isn't always correct, hence the reason for all of my research.

 

Please see what determines your residency in the link below:

 

http://www.moneymanagement.com.au/features/editorial/guide-superannuation-strategies-non-residents